Chap. 71.—An ACT to amend and re-enact Section 49-a of an act entitled, “an
act to revise, collate and codify into one act the general statutes of the
Commonwealth relating to banks and banking, which act shall constitute
and be designated and cited as the Virginia Banking Act, and to repeal all
Code sections and all acts and parts of acts inconsistent therewith, and to
provide penalties for the violations thereof’, approved March 27, 1928, as
heretofore amended, relating to the power of banks to make loans secured
by real estate and to change the number and designation of said section from
49-a to 48-a. : [H B 79]

Approved March 7, 1938

1. Be it enacted by the General Assembly of Virginia, That sec-
tion forty-nine-a of an act entitled, ‘‘an act to revise, collate and codify
into one act the general statutes of the Commonwealth relating to banks
and banking, which act shall constitute and be designated and cited
as the Virginia Banking Act, and to repeal all Code sections and all
acts and parts of acts inconsistent therewith, and to provide penalties
for the violations thereof,” approved March twenty-seventh, nineteen
hundred and twenty-eight, as heretofore amended, be re-numbered as
section forty-eight-a of said act and be amended and re-enacted so as
to read as follows:

Section 48-a. No bank shall make any loan secured by real estate
when such loan together with all prior liens and encumbrances on such
real estate exceeds fifty per centum of the appraised value of the real
estate offered as security, unless such loan be for a term not longer
than fifteen years and be secured by an amortized mortgage, deed of
trust or other instrument under the terms of which the annual install-
ment payments are not less than four per centum per annum of the
principal of the loan when such loan is for a period not more than
ten years, or not less than five per centum per annum of the principal
of the loan when such loan is for a period in excess of ten years but
not more than fifteen years, in neither of which events shall the amount
of the loan, together with all prior liens and encumbrances on such real
estate exceed sixty per centum of the appraised value of the real estate
offered as security, nor shall any bank make such loans in an aggre-
gate sum in excess of the amount of its capital stock actually paid in
and unimpaired plus the amount of its unimpaired surplus fund, or
in excess of sixty per centum of the amount of its time and savings
deposits at the election of the bank; provided, that any such bank may,
with the written consent and approval of the State Corporation Com-
mission, make such loans in an aggregate amount up to, but not in
excess of, seventy per centum of the amount of its time and savings
deposits. A loan secured solely by a mortgage, deed of trust, or other
such instrument upon real estate, or by notes or other obligations which
are so secured, shall, for the purposes of this section, be a loan secured
by real estate; a loan secured in part by a mortgage, deed of trust, or
other such instrument upon real estate, or by notes or other obligations
which are so secured, and by any other form of security, shall for the
purposes of this section, be a loan secured by real estate to the extent,
but only to the extent, of the value of the real estate security deter-
mined as herein provided and permitted: The appraisals herein re-
quired, if and when the loan shall exceed five hundred dollars, shall
be made by appraisers appointed by the board of directors, shall be in
writing, signed by the appraisers and shall be retained in the files of the
bank subject to examination by the bank examiners.

The provisions of this section shall not be construed to prohibit
any bank from renewing from time to time any such loans hereto-
fore made not in conformity herewith, provided such loans shall be
reduced as soon as reasonably possible so as to conform to the re-
quirements of this section, or to prohibit any bank from accepting as
security for a loan heretofore or hereafter made in good faith without
security or upon security since found to be inadequate, a mortgage,
deed of trust, or other such instrument upon real estate, or notes or
other obligations, which are so secured, nor shall the limits set forth
in this section apply to any loans secured by mortgage or deed of trust
which are insured by the Federal Housing Administrator under the
provision of Title II of the National Housing Act.